The Office Market in Budapest is Blowing Up2019.02.04
The Hungarian office market closed a very strong year last year, with gross rentals exceeding 171 000 square meters in the last quarter, an annual level of over 535 000 square meters.
Tópark Offices (15 355 square meters), Pasaréti Office Building (5 870 square meters), HillSide Offices (21 925 square meters) and Societé Budapest (1 120 square meters) were all delivered this quarter. Thanks to the transfer of these buildings, Budapest's modern office market was expanded by 44 265 square meters in the fourth quarter of the previous year, said the Budapest Real Estate Consultants Conciliation Forum (BIEF). Now, the total modern office space in Budapest is 3 628 105 square meters.
- Leased office space of 3,01 million square meters.
- Private office buildings of 609,7 thousand square meters of companies are located.
The vacancy rate was exactly 7,3 percent in the fourth quarter of 2018, down 0,2 percent from the previous year, which is a 90 basis point increase. On an annual basis, this means a 20 basis point reduction.
The Pest Non-Central Sub-Market is the most saturated sub-market as in the previous quarter, covering the entire Pest side, with the exception of the internal areas bounded by the Danube and the Grand Boulevard; It has a 4,3 percent vacancy rate.
Gross demand was 19 percent higher than in the same period last year, accounting for 171 490 square meters in the fourth quarter of 2018. The annual gross demand is 535 560 square meters.
The rental rate was 36,2 percent in the fourth quarter in total demand for new contracts. Pre-lease agreements reached 26 percent, contract extensions reached 25,3 percent, 12,2 percent of total demand growth.
The highest tenant activity was measured in the Váci út sub-market, as did the previous year. 38 percent of the total value appeared here. This is followed by the North Buda sub-market with a 15 percent share. The city center reached 13 percent, South Buda 11 percent.
A total of 202 rental contracts were registered with the BRF during the fourth quarter. Their average size is 849 square meters. There are 34 contracts for an area of over 1000 square meters, of which 8 are pre-lease agreements, 10 contract extensions, 12 new contracts and 4 extensions.
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